HE/VRII^G ON SENATE BILL 6951, FOR THE RELIEF OF THE 
STATE OF PENNSYLVANIA. 



^: ^^ Committee on War Claims, 

Saturday, May 21, 1910. 
The committee met at 10.30 o'clock a. m., Hon. Charles B. Lavp 
(chairman) presiding. 

The Chairman. The full committee is not present, but there is a 
quorum. As we have a stenographer, the members who are not 
present can look over the report and ascertain what has been done.. 
As the House convenes at 11 o'clock, we will proceed. 

STATEMENT OF MR. H. M. FOOTE, OF WASHINGTON, D. C. 

Mr. FooTE. Gentlemen of the committee, I am very much obliged 
to you for this courtesy in giving me an opportunity to represent the 
governor here as his agent in this matter. I appear in behalf of a 
bill which was under consideration by 3^our committee ^ni year, but 
with the added provision of making an appropriation of $50,000 to 
carry out the purposes of the bill. The Senate, however, has stricken 
out that provision and has left it as it stood before, without it. 

It is a bill, as you will discover, which authorizes the accounting 
officers of the Treasury to adjudicate the claim of Pennsylvania for 
its expenses in putting its militia into the field to resist the invasion of 
General Lee in 1863. Pennsylvania had all it could do at that time 
to look out for the balance of its troops which it had in the service and 
was paying interest on a loan of $3,000,000 for money which it had 
borrowed for that purpose. It was practically a bankrupt State at 
that time; the State had no available money to pay the ordinary war 
expenses of the GovernmeTit. When General Lee crossed the line, 
President Lincoln telegraphed to Governor Curtin to call out the 
militia to cooperate with the national forces. The governor — this is 
all a matter of record — telegraphed he had no available funds to pay 
the expenses, whereupon the President and Secretary Stanton tele- 
graphed back to him — and this is a matter of record — if he would get 
the money to pay the expenses of the militia that the Government, 
would make an appropriation to reimburse the State. Thereupon the 
governor went to Philadelphia and had a consultation with several 
bankers of that city and arranged to borrow the money for that pur- 
pose. He borrowed it upon a year's, or more, time at 6 per cent 
interest. 

After the militia had been mustered out, or withdrawn, rather, the 
State paid for their services and was subsequently reimbursed by the 
General Government for that payment. It also paid fort)^-one thou- 
sand and some odd dollars in interest on that loan. The legislature 
of the State, in 1863, passed a law appropriating the money to make 
44607—10 



RELIEF OF THE STATE OF PENNSYLVANIA. 






that payment good. Subsequently a joint resolution was passed b}'' 
the legislature, reciting all these facts to which I have called your 
attention and memorializing the Congress to make an appro]:)riation 
to make the State good. Thereupon the Congress, in April, 1866, 
passed a law appropriating S800,000 for that purpose. The State 
paid six hundred and seventy-one thousand and some odd dollars for 
the loan to pay for these services. 

On the 21st day of March, 1866, in pursuance of this resolution, a 
bill was introduced in Congress to pay this claim to reimburse the 
State. It was introduced for more than $800,000. Mind you the 
payment amounted to about nearly $800,000, the principal and 
mterest. Mr. Stevens — I did not have this record before you before — 
when the bill was under consideration, said : "I move to amend in line 
8 by striking out ''nine" and inserting "eight," so that it shall read 
"$800,000." The amendment was agreed to, and then Mr. Stevens 
proceeded to say: 

This bill passed this House on a former occasioi), and was lost between the two 
Houses. 

In 1863, at the time of the invasion of Pennsylvania, the States of Pennsylvania, 
New York, and New Jersey sent a large number of troops under the proclamation of 
the President and at the call of the governors of the different States to cooperate in 
repelling that invasion. They were in the service, under coihmand of officers of the 
United States. After the battle of Gettysburg, and the troops had withdrawn, they 
went on to settle the amount under the act of 1861, which authorized the treasurer to 
pay them. Fifteen million dollars had been appropriated for the purpose of settling 
all such debts by the act of February 25, 1862. In adjusting the accounts it was 
found that the accounts claimed and allowed to the States of New York and New 
Jersey absorbed the whole $15,000,000 and a few dollars more. The few dollars due 
to New Jersey have since been paid. 

At the time of the adjustment Pennsylvania agreed that she would allow her claim 
to remain back until the other States had been paid. As the invasion was in her 
territory it was thought that her troops should be last paid. But the $15,000,000 had 
run out, and the Secretary of War and the President telegraphed to the governor of 
Pennsylvania, asking him to raise the money to pay the troops, and promising that 
at the meeting of Congress payment would be recommended. There was nothing in 
the treasury at the disposal of the governor, so he went to Philadelphia and raised from 
a few gentlemen there about $700,000 and paid the troops. The accounts were since 
adjusted in the department here on the 4th of January, 1864. The amount allowed is 
$671,476. It is that amount with the interest due to those individuals which has since 
been paid by the State of Pennsylvania that it is proposed to pay. Pennsylvania has 
paid it, and that State is now substituted for these individuals. 

The purpose of the bill in appropriating $800,000 in 1866 was to 
make the State good not onlv for the six hundred and seventy-odd 
thousand dollars which it borrowed and paid for the services of these 
troops, but the interest which the State had also paid on that money 
which it borrowed. I need not stop here to 

Mr. Sims. Did the $800,000 bill pass? 

Mr. FooTE. Yes, it passed. 

The Chairman. Do you mind if I interrupt you? 

Mr. FooTE, No; I want to be interrupted. 

The Chairman. Now, according to the report of the Senate com- 
mittee the items are given as follows: "For amount paid in August 
and September, 1863, $671,476.43" ? 

Mr. FooTE. Yes. 

The Chairman. "For interest on the money borrowed to Septem- 
ber, 1864, $41,890.71; for expenses, $52.47, making a total of 
$713,419.61." Now, it had been my understanding, until I came 
to look at these figures, that the amount that was paid was the 



EELIEF OF THE STATE OF PENNSYLVANIA. 3 

principal— that is, the amount the State of Pennsylvania had been 
reimbursed for was the principal sum. 

Mr. FooTE. Yes. 

The Chairman. And that the contention here was over the inter- 
est and the expenses which the State of Pennsylvania paid to secure 
the loan. 

Mr. FooTE. That is just the contention, and that is all. 

The Chairman. Now, then, according to that, the amount that 
would have been allowed by the Federal Government for the prin- 
cipal would have been $671,476.43? 

Mr. FooTE. Yes. 

The Chairman. Yet according to the report it seems the first 
amount allowed was $667,074.35, and a subsequent allowance of 
$3,732.50, making a total of $670,806.85? 

Mr. FooTE. Yes. 

The Chairman. I did not know but what you could give us some 
explanation of the discrepancy? 

Mr. FooTE. Wlien the accounting officers settled the claim of the 
State for the payment of these troops the State actually paid six 
hundred and seventy and some odd thousand dollars — the amount 
you have stated — for these troops; when the accounting officers 
settled with the State it was found the State had improperly paid 
some little items, you understand, made some mistakes in compu- 
tation or otherwise, and they cut off three or four thousand dollars 
of it; a few years later it was reviewed, and three or four thousand 
dollars, or such a matter, was subsequently allowed. 

The Chairman. But the $670,806.85 is supposed to be the amount 
paid to cover the principal ? 

Mr. FooTE. Yes, sir. 

The Chairman. And the statement there that the principal sum 
was $671,000 was simply the difference due to errors? 

Mr. FooTE. Exactly; due to errors. The only contention here, so 
far as I understand it, relates to the subject of interest, this item of 
$41,000 of interest which the State paid to these bankers for the use 
of this money wherewith to pay these troops, and some fifty-odd 
dollars of expense the State went to in order to raise the money. 

The Chairman. So, put in a nutshell, the proposition that is pre- 
sented here is this: The State of Pennsylvania borrowed certain 
moneys to pay troops ? 

Mr. FooTE. Yes. 

The Chairman. The amount of the principal which it borrowed for 
that purpose it has been reimbursed for ? 

Mr. FooTE. Yes. 

Mr. Sims. Interest, too ? 

Mr. FooTE. No interest; that is just what we want. 

^Ir. Sims. You did have a bill passed for $800,000 ? 

Mr. FooTE. Mr. Sims, it was $800,000, or so much as was necessary; 
it was a general appropriation to cover the whole thing. 

IVIr. Sims. The $41,000 of interest which the State paid for the 
borrowed money was never paid to it ? 

Mr. FooTE. No, sir; not at all. 

Mr. Sims. Why was it not paid ? 

The Chairman. The principal question presented here is whether 
the Government shall reimburse the State for the money it cost the 



4 RELIEF OF THE STATE OF PENNSYLVANIA. 

State to get the loan, not for interest, but money which it actually 
paid to o-et this loan to help out the Government. Now, the point 
which, I think, is in the minds of the committee and which I would 
particularly like to have you discuss, is this: This bill calls upon the 
department to readjust this claim? 

Mr. FooTE. Yes. 

The Chairman. Now, what is in the minds of the committee, 
according to discussions heretofore had in the committee room, is 
this: Why this should be sent to the court, or, I mean, to the depart- 
ment for readjustment rather than being sent to the Court of Claims 
under the Tucker Act for a finding of facts, which would put the 
thing in some concrete sha])e so that Congress could pass definitely 
upon that. That is, I think, the main question. 

Mr. Spight. And put the committee in possession of all those facts. 

The Chairman. Yvhy should the matter go to the department 
instead of to the Court of Claims? There is one case we have had 
here, the Rhode Island case, that was sent to the Court of Claims 
under the Tuckej- Act. The point is why there should be a distinction. 

Mr. FooTE. In reply to that suggestion I want to make this state- 
ment, that there is not a single question of fact in dis})ute in this case, 
not one. The Treasury Department admits every single fact that I 
set up and allege here; it admits that the State of Pennsylvania paid 
this interest, or these expenses, rather, for the purpose of getting this 
money wherewith to pay these troops. 

Mr! Sims. Have you a copy of the act appropriating the $800,000 ? 

Mr. Foote. Yes, sir. It provides for the reimbursement of the 
State of Pennsylvania. 

Mr. Sims. Why did they not pay that interest ? 

Mr. Foote. I will tell you why. At that time, in 1866, the account- 
ing officers of the Treasury conceived the idea that this S4 1,000 was 
simply interest. They were carried away with the idea that inas- 
much as the Government never paid interest as such without spe- 
cific legislation that they would withhold payment of it for further 
consideration. 

Mr. Sims. Wliy has Pennsylvania let this drag for about fifty 
years ? 

Mr. Foote. I will get to that in just a moment. A very short 
time after that, or just before that rather, in 1866, the State of Indiana 
had presented its claim, a similar claim, for reimbursement for inter- 
est on its war loan, interest which it had paid to borrow money 
to equip its troops for the purposes of the Federal Government. The 
Treasury Department refused to allow that interest claim, because 
they conceived it to be purely and simply an interest account against 
the Government, and the accounting officers undoubtedly followed 
the decision of that case. 

Mr, Sims. Is that a surmise of yours or do the accounting officers 
so report ? 

Mr. Foote. I am stating to you what I know as a reputable attor- 
ney, what the records show in the department. I have been all 
through this case, and I would not misrepresent a fact. 

Mr. Sims. I am not intimating such a thing, but I want to know 
what position the department took at that time as to why they 
would not allow the $41,000. 



RELIEF OF THE STATE OF PENNSYLVANIA. 5 

Mr. FooTE. It simply refused to pay tliis $41,000 upon the theory 
that it was an interest claim which the Government was not bound 
to pay without specific legislation. 

Mr. Sims. I understand the law in that regard, that the Govern- 
ment does not pay interest. But here is an act reimbursing the 
State for what the State paid out on the principal matter. 

Mr. FooTE. Yes. 

Mr. Sims. But the interest has not been paid. Now, why has it 
taken fifty years to bring it before Congress? 

Mr. FooTE. I will tell you why it took all that time. Before the 
case was finally adjudicated in the Supreme Court of the United 
States, the case of the State of New York against the Government — 
and that was in 1890 — all of these interest claims of the various 
States had been suspended — that is, the payment of them had been 
suspended. 

Mr. Sims. That would be over twenty years ago. 

Mr. FooTE. Yes, sir; upon the theory that they were interest 
claims, and not expenses to which the State went in order to get 
money to pay these troops. I had the honor of representing the 
Government of the United States in the Department of Justice in the 
trial of that New York State case and I set. up the same defense the 
Treasury Department sets up, that it was an interest claim. You 
understand, the State of New York paid $131,000 in interest, being 
money which it borrowed to equip its troops for the service of the 
Federal Government. 

The Chairman. Do I understand you appeared in that New York 
case ? 

Mr. FooTE. I appeared for the Government in that New York 
case; I was the assistant of the Attorney-General at that time. I 
took the position precisely as the Treasury Department had thereto- 
fore taken the position for all those years — that it was an interest 
claim. You understand there were two items of the claim. The 
Court of Claims held with me on one item, but decided against me upon 
the other item. There were cross appeals; they went up to the 
Supreme Court, and we went up there and argued the case. The 
Supreme Court then, for the first time in the history of these pay- 
ments, announced the principle and established the doctrine that all 
of these interest items which the States had filed against the Federal 
Government were not interest accounts at all but legitimate expenses 
which the States had been to for the purpose of raising the money 
wherewith to pay their troops. 

Mr. Morse. Do you happen to know how manv States there are, 
other than Pennsylvania, that have just the same kind of claims ? 

Mr. FooTE. They are all paid, except — I will read you the list. 

Mr. Sims. You do not answer me why Pennsylvania held off for 
twenty years and did not do anything. 

Mr. FooTE. Pennsylvania has been before this committee a half 
a dozen times since that time — I do not say a half dozen times 

Mr. Sims. Pennsylvania has collected a very large claim from the 
Government ? 

Mr. FooTE. Yes, sir; Pennsylvania has collected the interest which 
it paid on its $3,000,000 war loan to equip its volunteers which were 
mustered into the service of the United States. This matter was 
looked after just as soon as possible, as soon as I got to be the agent 



6 BELIEF OF THE STATE OF PENNSYLVANIA. 

of the governor, and I have been industriously trying to get the 
Congress of the United States to pay this item. 

Mr. Sims. We paid a large amount of interest, something over a 
million dollars, was it not ? 

Mr. FooTE. Yes. 

Mr. Sims. Why was not this claim for interest included in that 
claim ? 

Mr. FooTE. Because this was an entirely separate matter. It 
was a matter which escaped my attention at first, because I was 
engaged in the other matter, but subsequently it was brought to my 
attention, among other matters. 

Mr. Sims. There would have been no difficulty about having this 
item go into the same bill ? 

Mr. FooTE. Exactly; but one was for a separate payment of 
interest. The three-million-dollar loan was one which the State 
made to raise money to equip its volunteers, and this was a separate 
item to reimburse the State for money which it paid under the 
peculiar circumstances I have related here this morning — that of 
calling out the militia to cooperate with the national forces. 

]Mr. Sims. But in principle it is just the same. Why it was not 
included in the same bill I do not understand. 

Mr. FooTE. No, no; the principle is not exactly the same. The 
act of July 27, 1861, provided that the Secretary of the Treasury 
should reimburse to the governors of the various States the costs, 
charges, and expenses incurred by those States in equipping their 
volunteers which were subsequently mustered into the service of the 
United States. 

Mr. Morse. That is the point. 

Mr. FooTE. These men were never mustered into the service of the 
United States; therefore it is a dissimilar claim from those which were 
covered by the act of July 27, 1861. 

Mr. Sims. These troops were never mvistered in? 

Mr. FooTE. No, sir. 

Mr. Sims. What did they do ? 

Mr. FooTE. They cooperated with the federal forces as militia of 
the State of Pennsylvania. 

Mr. Morse. Is not the difference here, that in the other cases they 
were mustered into the service of the United States and were used for 
the purpose of the defense of the United States alone, while in this 
instance they were not mustered in and were used only a part of the 
time for the purpose of the defense of the United States, and may have 
been used by the State for suppressing riots within the State, or 
carrying out the laws of the State, and for state purposes, and there- 
fore there is a vast difference between the two ? 

Mr. Sims. Well, it seems to me the principle is just the same, where 
the State paid interest in carrying out the federal obligations. 

Mr. FooTE. Exactly; there is no difference at all in principle. 

Mr. Sims. In this case I did not know, until now, that these soldiers 
were never soldiers of the United States. 

Mr. FooTE. No; they were not. 

Mr. Sims. Then the payment of this claim at all would be a matter 
of equity and liberality? 

Mr. FooTE. A matter of liberality and equity upon the part of this 
Congress of the United States to carry out what President Lincoln 
and Secretary Stanton said would be carried out. 



RELIEF OF THE STATE OF PENNSYLVANIA. 7 

The Chairman. That is, the governor of Pennsylvania was assured 
by President Lincoln and Secretary Stanton the repayment of this 
money if he raised it ? 

Mr. FooTE. Yes, sir. 

The Chairman. That th^ State would be reimbursed ? 

Mr. FooTE. Eveiy dollar of it. 

Mr. Sims. And it has been, according to the judgment of Congress 
and the accounting officers ? 

The Chairman. All of which was prior, Mr. Sims, to the decision 
in the New York case. 

Mr. Sims. I said according to the judgment of Congress and those 
who determined it at the time. 

Mr. FooTE. It virtually has been appropriated for, actually has 
been appropriated for; this never ought to be here; it ought to have 
been paid a half a century ago, forty-four years ago, because Congress 
appropriated the money to pay this very claim in tliis bill. 

Mr. Sims. Eight hundred thousand dollars? 

Mr. FooTE. Yes; but the accounting officers believed they were 
smarter than even Congress was; but let me say. Congress can do 
any tiling it wants to. 

Mr. Sims. That is the question that strikes me. Why did you not 
have a bill passed to pay the S4 1,000 just as soon as the accounting 
officers did not allow it ? 

Mr. FooTE. At that time I was not the agent of the governor nor 
attorney of the State. All of these interest items were suspended 
upon the question of legal liability. I suppose the agent of the gov- 
ernor conceived the idea that tliis claim was like other interest 
accounts and, therefore, it would not be paid. But after the New 
York case was decided then all of these States came in with their 
claims for interest, and they have been paid as expense accounts. 

Mr. Sims. The State virtually abandoned it after the statement of 
the accounting officers ? 

Mr. FocHT. Under the act of 1902 allowances were paid to Maine, 
New Hampshire, Rhode Island, and Pennsylvania. 

Mr. Sims. Pennsylvania got an enormous appropriation. 

Mr. FooTE. Under the decision of the New York State case New 
York was paid ,$131,515.81; New Hampshire, $108,372.53; Rhode 
Island, !»124,6]7.79; Pennsvlvania, $689,146.29; Indiana, $635,850.20; 
,Iowa, $156,417.89; Michigan, $382,167.62; Ohio, $458,559.36; Illinois, 
$1,005,129.29; Vermont, $280,453.56. Now when these payments 
were made 

The Chairman. Did those payments in each instance allow for 
interest and expenses paid by the States to get the loan ? 

Mr. FooTE. Y^es; in the State of Pennsylvania I recovered $50,000 
for gold premiums paid to get interest. 

Mr. Morse. For the equipment of troops not mustered in? 

Mr. FooTE. Mustered in, sir. 

Mr. Morse. Oh, yes; that is the difference. 

The Chairman. There is one point I did not get quite clear in my 
mind. Is there some item that has been paid the State of Pennsyl- 
vania in addition to what is shown in this Senate report ? 

Mr. FooTE. Y^es; I was just coming to that. After this first pay- 
ment had been made to Pennsylvania on its volunteer war loan 
Comptroller Tracewell took up 'the adjustment of other Western 



8 RELIEF OP THE STATE OF PENNSYLVANIA. 

States, and he decided that every dollar which the State had paid in 
interest was reimbursable, notwithstanding the fact that the Gov- 
ernment may have, from time to time, reimbursed the State. You 
understand, when I settled the claim of Pennsylvania in the Court 
of Claims, I gave the Government credit for the reimbursements 
which had been made from time to time on its war expenses, and the 
first account was settled according to that basis. After the comp- 
troller had settled the Western States, and paid no attention what- 
ever to payments made from time to time. Congress at once opened 
the claims of Pennsylvania, Maine, New Hampshire, Rhode Island, 
and Indiana, on the basis of the settlement of the other States. 

Mr. Sims. I took part in that discussion on the floor of the House, 
and I remember part of it was this, that the States, in order to get 
this money, sold bonds for a long time to run: the Government 
reimbursed them before the bonds matured, and yet they charged 
the Government with all the interest they paid on the bonds, and 
would not give the Government one cent of credit for the interest 
that would have accumulated. 

Mr. FooTE. You have got it exactly. And so, after the comp- 
troller had decided otherwise and those States had been paid accord- 
ing to this other basis of settlement, the claims of the State of Penn- 
sylvania were reopened precisely upon the same basis as those of other 
States. 

The chairman has said something about my discussion which has 
led off into another channel. Of course, I want to explain every- 
thing to the committee. The chairman suggested something 
about 

The Chairman. I know it is a little past the hour for the convening 
of the House, but this is an important matter, and unless gentlemen 
are very anxious to get over there I would suggest that we take the 
liberty of continuing the hearing for a little while. Could vou finish 
by 11.30, Mr. Foote? 

Mr. FooTE. I think I can finish in five minutes. 

Abandoning further discussion upon the subject-matter of these 
other loans, which were paid the States, because they are not material 
here ; the only question for you to consider now is, in view of all this 
legislation, in view of the agreement made by President Lincoln and 
Secretary Stanton with Governor Curtin, and in view of the fact that 
the State in absolute good faith, at the time of this agreement, 
borrowed this money and paid this amount of interest: Ought not 
that act of 1866 to be carried out in good faith; ought not you to 
direct the accounting officers of the Treasury to do what Congress 
forty-four years ago said they must do ? That is all there is in this 
case. 

You won't get a single additional fact in connection with this case 
by sending it to the Court of Claims. If you did send it there you 
would get back the same set of facts. They would send to the 
Treasury Department and get the very facts that are now before this 
committee — they could not get them anywhere else; they are record 
facts, records which the Treasury Department's accounting officers 
have in their possession to-day and records which are as solemnly 
proven as any records in any case in the world can be proven. The 
accounting officers have accepted that proof and they have never dis- 
puted a word of it, and there is not a single fact in this case that has 



RELIEF OF THE STATE OF PENNSYLVANIA. 9 

been in dispute for a single minute. And, therefore, I want to say 
there is not a single element of help which the Court of Claims can 
give to you, even though you had jurisdiction, which you have not, 
to send this to the Court of Claims, under the Tucker Act. That 
court would simply send over to the Treasury Department and say, 
"Give us the facts in this case of Pennsylvania," and they would 
send to you precisely what you have here to-day, and those facts 
would simply be a restatement of the facts which I have undertaken 
to give you here to-day, that Congress has absolutely paid this 
claim once, but that these accounting officers have refused arbi- 
trarily to carry out the mandate of that statute. 

There is not a question of injustice or inequality in this case; 
•everything is as clear as it can be, and it is only for this committee 
now to say whether it shall follow the beaten path which prior com- 
mittees have already made, whether it shall adopt what the Senate 
has already done and reenact what the Congress of the United States 
did forty-four years ago and pay this meritorious claim based upon 
a contract, Mr. Chairman, made by the greatest men of that century. 

The Chairman. Is that $800,000 that was appropriated available? 

Mr. FooTE. Not at all; it was covered into the Treasury years ago. 
Gentlemen, you need not be afraid 

The Chairman. A bill was reported out of the committee to cover 
this claim in the last Congress? 

Mr. FooTE. Yes, sir. 

The Chairman. Was that substantially identical with this bill? 

Mr. FooTE. It was precisely the same, with the addition that 
$50,000 was appropriated to carry out its provisions. 

The Chairman. That bill contained section 2, which has been 
stricken out by the Senate ? 

Mr. FooTE. Yes; this bill is far less objectionable to the committee, 
it seems to me, than that was. 

Mr. Haugen. When was this first presented to Congress ? 

Mr. Foote. I can not tell you, sir; it has been here for twenty-five 
years. 

Mr. Sims. This provision is mandatory; it is not a question for the 
accounting officers to settle. This commits Congress to the payment 
of the amount. The section reads: 

That the sum of fifty thousand dollars, or so much thereof as is necessary, is hereby 
appropriated, out of any money in the Treasury not otherwise appropriated, to pay 
whatever money may thus be found due the State. 

Mr. Foote. That is what we want them to do. 

Mr. Haugen. Have we any statement from the Treasury Depart- 
ment showing the amount due, or admitting the amount due ? 

Mr. Foote. Yes, sir. 

Mr. Hollo WAY. There was a statement in the last Congress. 

Mr. Foote. There was a statement from the Treasury Department 
admitting all these facts and stating this item ought to be paid, but 
they have no jurisdiction. 

Mr. Sims. They admit the fact that this $41,000 was interest paid 
by the State of Pennsylvania on money they borrowed ? 

Mr. Foote. Yes. 

Mr. Sims. The Treasury Department admits that, but the Treasury 
Department, as I understand, does not claim it is a legal liability 
against the United States ? 



10 RELIEF OF THE STATE OF PENNSYLVANIA. 

Mr. FooTE. No; until you say they shall pay it. 

Mr. Sims. This bill says they have to pay it. 

Mr. FooTE. I haA^e been before the comptroller in the case and he 
admits the justice of this claim. 

Mr. Sims. That is your personal view ? 

Mr. FooTE. He says it is res adjudicata; that administrations have 
come and gone, and you know the rule that the}?- can not reopen a 
claim that was disposed of by a preceding atlministration. 

Mr. Sims. The Senate Committee on Claims has refused to consider 
hundreds of claims on accounts of laches ? 

Mr. FooTE. This is not laches. If you will go over the records 
here, you will find the State of Pennsylvania has been coming here 
for ten or fifteen years or more, maybe twenty years, asking you to 
pass this bill. 

Mr. Morse. Now, then, these were state troops that were never 
mustered in ? 

Mr. FooTE. Yes, sir. 

Mr. Morse. At the same time other States may have had state 
troops which were never mustered in, and never used in the service 
of the United States, and those other States would have no equitable 
claim because their troops were never mustered in or used in the 
service. The State of Pennsylvania has this equitable claim on account 
of the fact that at the time of the invasion of Pennsylvania, prior to 
the battle of Gettysburg, the state troops were used in the defense 
of the nation. Is that it ? 

Mr. Foote. That is right, sir. 

Mr. Morse. Now, let us 

Mr. Sims. Is that not admitting it too strongly ? 

Mr. Morse. Possibly it is. But let us suppose that other States 
raised troops, state troops, which were used in the defense of the na- 
tion and never inustered into the service of the United States; now, 
then, if these other States had money in the treasury, did not borrow 
money, but had it in their treasuries and paid those troops, would 
they not have just as much right to come before Congress and ask 
for the interest on the money they did have and did use as Pennsyl- 
vania has to ask for interest on the money it tlid not have and had 
to borrow ? 

Mr. Foote. I will answer that question by saying that under the 
law there was no expense to the State if it had this money in its 
treasury to use for disbursements for military purposes; it was not 
out anything except the actual money which it paid. To adopt that 
principle would permit every State to now come in and say: '' We' 
want interest on the money which we took out of our treasury and 
paid to run the Government." 

Mr. Morse. That is exactly what I am afraid of — that it will 
establish a precedent. 

Mr. Foote. Not in the slightest; it can not establish that principle 
because the Supreme Court in this case has decided the lines of lia- 
bility by sa3^ing that only interest which the State paid for money 
which it borrowed to pay troops is part of the legitimate expenses of 
the Government; if the State did not pay an}- interest it can not get 
any interest, for it was not an expense to the State, they can not say 
they want to be reimbursed for expenses they have never been put to. 
Now, Pennsylvania was situated a little differently from any other 



RELIEF OF THE STATE OF PENNSYLVANIA. 11 

State, Mr. Chairman; the State of Pennsylvania stood hke an impene- 
trable wall of cement, I might say, against the invading hosts of that 
fearless and intrepid army of the Stars and Bars; it was upon our 
borders that the greatest battle of that conflict was fought, and this 
militia, and the mihtia of that State, were called into the service of 
the Federal Government and cooperated with the national forces in 
that campaign; that service was recognized as service for the Federal 
Government and not as service for the State of Pennsylvania; and 
when Lee crossed the borders of Pennsylvania again into Virginia 
the mihtia of Pennsylvania, cooperating with the national forces, 
followed him across the border of Pennsylvania into a sister State. 
That shows you that Pennsylvania cooperated with the national 
forces, and that service was recognized l)}^ the Federal Government, 
and these troops were paid by the Federal Government, so far as 
being equipped and fed was concerned. The Government actually 
paid these troops, it clothed these troops, it took care of these troops 
down to the time of paying for their services. Then the State of 
Pennsylvania paid them, borrowed the money and paid them, and 
Congress said, forty-four years ago, you can not make the promise 
good unless you pay the interest which Pennsylvania paid to get 
that money. It is equitable; there is nothing that can be said against 
it on any ground of ineq[uity or injustice. 

Mr. Sims. Its basis is in equity; there is no legal claim at all 'I 

Mr. FooTE. There is no legal claim; I stand here to admit that 
fact; it is not reimbursable under the act of July 27, 1861, because 
these men were not actually mustered into the service of the Ignited 
States. 

Mr. Sims. How long did they serve under this call ? 

Mr. FooTE. Sixty days. 

Mr. Sims. And only in the State, not out of it ? 

Mr. FooTE. They cooperated with the national forces, as the 
record shows, in following General Lee across the bbrder into Mary- 
land, and several of the militiamen were killed after they had crossed 
the border; they were in the battle of Gettysburg, a battle which was 
not fought for the State of Pennsylvania; they cooperated with the 
national forces there in that bloody conflict. 

Mr. Sims. I was asking for information only. 

Mr. FooTE. And they laid down their lives, just the same as those 
in the national forces, and the Government said those men were 
entitled to payment by the Federal Government. 

Mr. Sims. I understand they are all entitled to pensions like any 
other soldiers, but this question is one of the reimbursement of the 
State of Pennsylvania. 

Mr. FooTE. It simply appeals to your sense of equity and justice. 

The Chairman. I think in the consideration of this claim we may 
safely assume, under the decisions of the court and of the department, 
that a claim for interest paid by the claimant is a legitimate claim ? 

Mr. FooTE. Yes, sir. 

The Chairman. All other things being equal ? 

Mr. FooTE. Yes, sir; as an expense; not as interest, but as an 
expense. 

The Chairman. That line of distinction seems to have been clearly 
drawn. The State of Pennsylvania would not think of coming here, 
of course, and claiming interest on this indebtedness from the time 
the principal was paid by the Federal Government ? 



12 RELIEF OP THE STATE OP PENNSYLVANIA, 

Mr. FooTE. Oh, no. 

Mr. Haugen. Why was not this included in otlier bills; why has it 
not been disposed of before; I understand this has been before Con- 
gress before ? 

Mr. FooTE. A great many times. The only answer is it was not, in 
contemplation of law, precisely the same as the interest claims of 
other States. 

Mr. Haugen. But that question was settled twenty years ago. 

Mr. FooTE. I know; but since twenty years ago, since that time, 
all the States have come in under the decision in the New York case, 
and this claim has been before committee after committee. 

The Chairman. Do you know whether there are any other States 
now having similar claims ? 

Mr. FooTE. My information, Mr. Chairman, is that this is the only 
claim that is unpaid. 

Mr. Morse. Were any other similar claims ever paid d 

Mr. Foote. I think so. 

Mr. Morse. Can you cite us to any ? 

Mr Foote. I can not, but I think very likely that if the records 
are looked up you can ascertain. I think Mr. Holloway may know. 

Mr. HoLLOW^AY. Missouri. 

Mr. Morse. Any other State than Missouri ? I know Missouri 
used troops in the defense of the nation that were not mustered into 
the service of the Government. 

Mr. Foote. I can not tell you. Mr. Holloway may be able to tell 
you. Missouri has been paid the same, he says. 

BRIEF FILED BY MR. FOOTE. 

BRIEF IN SUPPORT OF SENATE ACT NO. 6951, FOR THE RELIEF OF THE 
STATE OF PENNSYLVANIA. 

The Chairman and Gentlemen of the War Claims Committee. 

Gentlemen: A bill providing for the payment of this claim has 
been reported with a favorable recommendation by your committee 
several times, and twice at least by the Claims Committee of the 
Senate. It has recently been passed by that body. At the first 
session of the Sixtieth Congress your committee, in Report No. 1136, 
reported unanimously in favor of the pending measure. 

There is not a single question of fact respecting this claim in dis- 
pute. It is admitted by the Treasur}-^ Department that the State of 
Pennsylvania expended $671,476.43 in payment of the services of its 
militia called into the service of the United States at the request of 
the President in June, 1863, to aid in the general defense against the 
invasion of General Lee into that State. 

It is admitted that the State borrowed the money, through Gov- 
ernor Curtin, of certain bankers in Philadelphia, with which to make 
that pajanent, and that there was paid by the State $41 ,890.71 as inter- 
est on the mone}" thus borrowed, besides $52.47 in costs connected 
with said loan. 

It is also admitted that the legislature of the State appropriated 
the money to pay these several items, and b}^ its joint resolution 
passed the 3d day of February, 1865, petitioned the General Gov- 
ernment to refund the same to the State in conformitv with the 



RELIEF OF THE STATE OF PENNSYLVANIA. 13 

assurances of President Lincoln and Secretary Stanton that the 
same would be done. 

It is shown by the record that in pursuance to said resolution the 
Congress of the United States on the 12th day of April, 1866, appro- 
priated the sum of $800,000, or so mucli thereof as might be necessary 
to pay said claim of the State. ' ' 

It also appears that in pursuance to said appropriation a Treasury 
warrant was drawn to the order of the governor of the State for the 
sum of .1667,074.35, on the 18th day of June, 1866, and that on the 
2d day of March, 1892, another warrant was so drawn for the sum of 
$3,732.50, making in all the sum of $670,806.85, to apply on the State's 
claim, being $669.58 less than the amount paid by the State for and 
on account of the services of its militia. 

By a memorandum made by the Secretary of the Treasury, attached 
to said first payment, it appears that said payment was made as an 
advance to the State, and that the accounts as approved by the Secre- 
tary of War, not having l)een fully stated and passed upon by the 
accounting officers of the Treasury, would be subject to reexamina- 
tion and final settlement by said officers thereafter! 

All of the foregoing facts are disclosed by a report from the Treas- 
ury Department now in the hands of this' committee, and they can 
not be controverted. Such being the case, there is no other depart- 
ment or court which could afford this committee any assistance 
whatever in the disposition of this claim; especially is this"^so in regard 
to the Court of Claims, because even if it were sent to said court under 
the Tucker Act, which can not legally be done, the court could not 
consider a single legal question involved in it, but would be con- 
fined in its jurisdiction to simply a finding of facts, and these it would 
obtain from the Treasury Department, which has already given this 
committee all the facts which it could furnish said court.' 

It must be borne in mind that unless a bill is pending before this 
committee making an appropriation of money it can not be sent to 
that court under said act; and that unless there are facts in dispute 
the claim can not be referred to said court under the Bowman Act. 
Under the peculiar status of this claim, therefore, the court would 
have no jurisdiction to consider it if sent to it under either of said 
acts; because, aside from legal objections, which are insurmountable, 
which prevent this being done, the Government admits all of the 
facts in support of this claim, and there is not a single one in contro- 
versy. To attempt, therefore, to dispose of it by either of these 
methods would not only be unjustifiable, but would be doing the 
State of Pennsylvania a great injustice, one which would involve 
delay and expense without serving any practicable purpose whatever. 
I refer to all these facts and circumstances because when brought 
to the attention of Congress, just after the war closed, what did it do ? 
Undertake to repudiate this just and sacred debt? No. The Presi- 
dent had said that if the State would raise the money and pay off these 
men for their services that the United States would consider the debt 
one of honor and that the State should be reimbursed in full for its 
expenditure on that account. And so a bill was introduced in Con- 
gress making an appropriation for that purpose, and if the committee 
will take the pains to read the proceedings there when that bill was 
under discussion (Congressional Globe, 39th Cong., 1st sess., p. 1553), 
it will find that its object and purpose was not only to pay the sum 



14 RELIEF OF THE STATE OF PENNSYLVANIA. 

of $671,476.43, which the State actually borrowed and paid these 
troops, but also to pay the interest on said sum so borrowed, and 
that the bill was amended for that very purpose. We have never 
until this time examined that record, but since we have there remains 
no more doubt that Congress included the interest item in that appro- 
priation than there exists a doubt that the bill itself became a law. 

These interest and cost items, therefore, have once been appro- 
priated for by said act which was approved forty-four years ago the 
12th day of last month; but the accounting officers of the Treasury 
Department arbitrarily suspended payment of them upon the theory, 
undoubtedly, that as an interest claim the United States was not 
liable to pay them, forgetting that Congress then and now has the 
power to pay interest upon every debt which the Government owes, 
and that the inhibition against allowing interest on such claims only 
extends to the courts of the United States. 

If there were no other facts in this case to bring to the attention of 
this committee this one alone should convince it that this act of the 
Senate directing the accounting officers to state a liability to pay 
this interest is only to carry out the original mandate of Congress to 
which we have referred, and that such being the case there should 
not be one single voice raised against the measure. 

But let us suppose that Congress did not intend to include this 
interest account in said appropriation, the same would now he reim- 
bursable to the State upon the principle announced by the Supreme 
Court of the United States in the interest claim of the State of New 
York against the United States, reported in 160 United States Re- 
ports, pages 599, 619, which the Senate report refers to on page 2, 
No. 488. 

That was a case precisely like this. The State of New York paid 
$131,188.02 as interest on money which it borrowed to equip its 
troops for service in the civil war. Congress, on the 27th day of 
July, 1861, passed an act directing the Secretary of the Treasury to 
refund to the governor of each State, or his agent, the costs, charges, 
and expenses properly incurred in equipping the »State's quota of 
troops for saicl service. The State of New York, the same as all 
the other Northern States, was obliged to borrow the money at inter- 
est for that purpose. After the war closed the State filed its claim 
for said expenditures, which was paid. Subsequently it filed a claim 
for the interest wdiich it had paid, as above, on its war loan. The 
payment of that claim was suspended by the accounting officers of 
the Treasury, just as they suspended payment of this claim. Finally 
the claim was referred to the Court of Claims under the provisions of 
section 1063 of the Eevised Statutes of the United States. I had 
the honor of representing the Government in the trial of the case 
(26 Ct. Cls., pp. 467, 481), and I took the position that inasmuch as 
the claim was one for interest it could not be allowed in consequence 
of the inhibition contained in section 1091 of the Revised Statutes, 
which prohibits the court from allowing interest on any claim against 
the Government unless authorized to do so by an act of Congress. 
The court refused to accept my view of the case and entered a judg- 
ment for the State for $91,320.84, being the interest which it paid 
on money borrowed in the city of New York for war purposes; but 
refused, to allow the State for interest to the amount of $39,867.18 
which it had paid to the canal fund for money used from that source 
for the same purposes. 



BELIEF OF THE STATE OF PENNSYLVANIA. 15 

Both the State and the United States appealed from the decision 
of the Court of Claims to the Supreme Court of the United States 
which (in vol. 160, pp. 621, 622) held: 

"That the interest paid by the State on its bonds issued to raise 
money for the purposes expressed by Congress (in the act of July 27, 
1861, supra) constituted a part of the costs, charges, and expenses 

groperly incurred by it for those objects. Such interest when paid 
ecame a principal sum, as between the State and the United States; 
that is, became a part of the ago;regate sum properly paid by the State 
for the United States. The principal and interest so paid constitute 
a debt from the United States to the State. It is as if the United 
States had itself borrowed the money through the agency of the State. 
We therefore hold that the court below did not err in adjudging that 
the $91,320.84 paid by the State for interest upon its bonds issued 
to defray the expense to be incurred in raising troops for the national 
defense v\'as a principal sum which the United States agreed to pay, 
and not interest within the meaning of the rule prohibiting the allow- 
ance of interest accruing upon claims against the United States prior 
to the rendition of judgment thereon." 

The court then proceeded to say that the other item of interest on 
account of the canal-fund loan was as much reimbursable to the State 
as the other item was, because that fund had been set apart by the 
canal commissioners as an interest-bearing fund and hence that fund 
was as much entitled to interest on the money of it which the State 
used as it would have been had the same been loaned to an individual. 
Accordingly a judgment was directed to be entered in favor of the 
State for both of said items, amounting to $131,188.02, as stated. 

"What was the result of tluit decision? Why, every Northern 
State east of the Mississippi River has been refimded by the General 
Government the interest which it paid on loans created for war pur- 
poses the same as the State of New York was. And what is more, 
these accounts have all been settled by the accounting officers of the 
Treasury under the provisions of legislation just like this which we 
are now considering which directs these officers to settle a like claim 
for the State of Penns^dvania. 

In view, therefore, of all these facts, is there a single voice that 
can be raised in opposition to the payment of this doubly meritorious 
claim ? Why should there be any hesitancy about allowing the 
accounting officers to restate this account? Is it believed that they 
would state a liability against the United States which ought not to 
be paid ? Congress has once said that it should be paid, but those 
officers have arbitrarily thwarted the legislative will, and now, after 
a reconsideration of the matter, admit the justness of the claim, but 
plead res adjudicata. It is the first time in my experience that I 
nave discovered that either an individual or a State was estopped 
from asserting a claim to money which Congress has given by an 
appropriation simply because the officer who was directed to pay it 
refused to perform his duty. I say, without hesitation, that no 
more just and meritorious claim was ever before this committee. It 
was created by virtue of a patriotic compact entered into between 
President Lincoln, Secretary Stanton, and Pennsylvania's war 
governor, Andrew G. Curtin. And it was the means by which the 
militia of that State were enabled to cooperate with the national 
forces in helping to drive the army of General Lee from her borders. 



16 RELIEF OF THE STATE OF PENNSYLVANIA. 

Mr. Chairman, I love that grand old Commonwealth which gave 
me birth. Her history and her glorious traditions are ever dear to 
me. She stood like an impenetrable wall of adamant against the 
invading hosts of that fearless and intrepid army of the stars and 
bars. Within her borders was fought the greatest battle of that 
civil contest. During those eventful days her best and bravest ^ons 
crimsoned the soil of that battlefield with their blood that this 
Republic might live and this Union be maintained through all the 
ages. 

This great Government has never yet broken its promise to the 
State, which grew out of her noble and patriotic example. Forty- 
four years ago it undertook to fulfill a compact made between the 
greatest men of that century, by which the State came to the rescue 
of the Federal Government in a great crisis of its history. But 
those whose duty it was to execute the legislative mandate in that 
regard and make that promise good have all these years refused to 
perform their duty. Time after time this committee has said that 
that duty must be performed, and the State is again here asking that 
once more you shall say by your report that these officers must per- 
form a duty which has been so long deferred. 

(Thereupon the committee adjourned.) 



